Why Poundland Is Struggling On Britain’s High Streets

A busy Poundland on Peckham’s Rye Lane closed this week after 11 years, leaving shoppers wondering where their cheap toiletries and snacks will now come from. That empty unit is not an isolated loss — it’s part of a much larger wobble in Britain’s discount sector. Since the summer more than 100 budget shops have either shut or been marked for closure. Poundland itself was sold in June for a nominal £1 and has launched a turnaround that will see its estate fall from roughly 800 stores to between 650 and 700. The chain says it has already closed 57 loss-making shops and that a further 48 are being vacated because landlords are taking back leases. So why are stores designed for tight budgets struggling when many households are pinching pennies? Part of the answer is how shoppers now behave. Retail analyst Catherine Shuttleworth says customers know prices inside out, share deals on their phones and buy only specific lines where it’s cheapest. That savvy hunting means visitors don’t necessarily fill a basket in a single visit, squeezing margins for shops that rely on volume. Competition and rising costs make matters worse. Discount chains face higher employer costs following last year’s Budget and minimum wage rises — a heavier burden when prices already sit at rock-bottom. Shipping disruptions after the pandemic pushed freight costs skywards, forcing some operators to abandon the “everything for £1” model. One example: OneBelow rebranded to OneBeyond and moved away from strict £1 pricing; it now runs 132 stores. Online challengers have also bitten into the market. Temu, AliExpress and other low-cost Chinese platforms — used by a significant share of UK shoppers last year — sell very cheap goods direct to consumers. Amazon has introduced its own ultra-low-cost section and social-commerce channels such as TikTok Shop mean small sellers can undercut high-street overheads. Mintel figures suggest about 30% of UK online shoppers used Temu in the year to September 2025, while 14% used AliExpress. Not every discount retailer is in trouble. The Range expanded aggressively this year after buying Homebase, Home Bargains is still growing, and Savers is moving into the empty Peckham space. For survivors, the festive season remains make-or-break: a strong Halloween and Christmas can tip a year from loss to breakeven. The lesson for struggling chains is simple: keep the offer clear, control costs and know what customers will buy before they do. If they don’t, consolidation looks likely — and the bargains that many households rely on could become harder to find on the high street. --- Managing your business finances? TaxAce provides smart online accountancy services for UK businesses with flexible monthly plans. Image and reporting: https://www.bbc.co.uk | Read original article